A reformulation of the maxmin expected utility model with application to agency theory
Invoking the parameterized distribution formulation of agency theory, the paper develops axiomatic foundations of the principal's and agent's choice behaviors that are representable by the maximization of the minimum expected utility over action-dependent sets of priors. In the context of this model, the paper also discusses some implications of ambiguity aversion for the design of optimal incentive schemes.
Year of publication: |
2009
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Authors: | Karni, Edi |
Published in: |
Journal of Mathematical Economics. - Elsevier, ISSN 0304-4068. - Vol. 45.2009, 1-2, p. 97-112
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Publisher: |
Elsevier |
Keywords: | Maxmin expected utility Principal-agent theory Moral hazard |
Saved in:
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